Demand for BMW cars in the Emirates has increased so much this year that dealerships across the country plan to invest Dh300 million (US$81.6m) building showrooms and repair shops.
The move comes after a 19 per cent rise in sales in the first quarter of the year.
"The UAE is a very significant market for us and has an eclectic mix of customers that are local and expat," said Graham Grieve, the vice president of importer markets for BMW globally. "The investment is not only important in terms of sales and performance, but also the type of business that we do."
The brand's X5 and X6 models are becoming increasingly popular as the economic recovery takes hold, Mr Grieve said.
He was in the UAE last night to attend the opening of a flagship showroom on Sheikh Zayed Road in Dubai, built and financed by AGMC, the exclusive dealer for BMW, Rolls-Royce and Mini in Dubai, Sharjah and the Northern Emirates.
The Dh50m spent so far on the new showroom is part of the dealer's Dh80m expansion plan for this year.
"We are investing on many different levels to ensure we have the right facilities and staff to sell new and pre-owned cars," said Stathis I Stathis, the newly appointed managing director of Al Batha Automotive Group, AGMC's parent company.
A Mini showroom is expected to be launched in Media City by the end of the year. Although AGMC is making a hefty financial outlay, the company's investment is dwarfed by that of Abu Dhabi Motors, the exclusive dealer in the emirate, which is spending Dh220m on showrooms and maintenance facilities.
Abu Dhabi is BMW's fastest-growing market, with sales growth of 42 per cent in the first quarter. Dubai is up 38 per cent and Saudi Arabia 11 per cent.
Despite unrest across much of the region, BMW ended the first quarter of this year with a 19 per cent growth in sales.
"It would be very nice to see that growth continue through the year," Mr Grieve said. "Whether we succeed or not generally depends on how the political situation in the region develops. We have clearly been affected in some of our key areas like Syria, Bahrain and Lebanon, but we have still continued to see those very high growth rates."
A total of 4,635 BMW and Mini cars were delivered to customers across 14 markets in the region in the first quarter.
"Some of the business that we may have missed at the beginning of the year I hope we catch back," Mr Grieve said. "From an economic and social perspective, I hope we get back to stability very soon."
The BMW 5 Series was the company's best-selling model in the first quarter, followed by the flagship BMW 7 Series, the BMW X6 Sports Activity Coupe and the BMW 3 Series.
A new 6 Series Coupe is planned for the region in September, Mr Grieve said. BMW operates internationally with 24 production sites in 13 countries and a sales staff and representatives in more than 140 countries.
The BMW Group sold 1.46 million cars and more than 110,000 motorcycles worldwide during the last financial year.
rjones@thenational.ae
UAE currency: the story behind the money in your pockets
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
What is blockchain?
Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.
The main difference between blockchain and other forms of DLT is the way data is stored as ‘blocks’ – new transactions are added to the existing ‘chain’ of past transactions, hence the name ‘blockchain’. It is impossible to delete or modify information on the chain due to the replication of blocks across various locations.
Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.
However, one of the major problems that has come to light has been the presence of illicit material buried in the Bitcoin blockchain, linking it to the dark web.
Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.
The specs
Engine: 3-litre twin-turbo V6
Power: 400hp
Torque: 475Nm
Transmission: 9-speed automatic
Price: From Dh215,900
On sale: Now
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
About Housecall
Date started: July 2020
Founders: Omar and Humaid Alzaabi
Based: Abu Dhabi
Sector: HealthTech
# of staff: 10
Funding to date: Self-funded
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MATCH INFO
Uefa Champions League semi-finals, first leg
Liverpool v Roma
When: April 24, 10.45pm kick-off (UAE)
Where: Anfield, Liverpool
Live: BeIN Sports HD
Second leg: May 2, Stadio Olimpico, Rome
